Public, a leading investing platform, has released its 1H 2023 report based on a survey of over 2,000 retail investors and investment flows throughout the year. The report underscores a significant shift in investor behavior and preferences. Investors remain active but have started to diversify their strategies in notable ways.
Diversification Takes Center Stage
One of the standout points in the report is that investors are broadening their portfolios. They now own 25% more distinct asset classes compared to last year, ranging from stocks and ETFs to Treasuries and cryptocurrencies. ETFs, in particular, have seen a staggering 4.4X year-over-year increase in share of portfolio AUM on Public. This comes alongside a surge in interest for AI thematic ETFs, which have seen a 34% YoY increase in net new investors.
Cultural Moments Shape Investment Choices
Cultural trends are also affecting investment decisions. For instance, Nvidia emerged as one of the most viewed and traded stocks on Public. Pop culture plays a role too. Mattel saw a 6.6X increase in the number of Public investors following the success of “Barbie.” Meanwhile, despite controversies, the number of investors in Bud Light’s parent company, AB InBev, rose by 1.5X since April 2023.
Trust and AI in Research
Investors are becoming more cautious about where they get their financial information. Trust and credibility in financial sources have become “significantly” more important for 69.4% of investors. Additionally, 19% of retail investors have adopted AI to help with their research, an avenue many are keen to explore further.
Changing Economic Outlook
Retail investors show a mixed bag of sentiments about the economy. While 59.9% are optimistic or neutral, 40.1% express pessimism. Risk appetites have also evolved, with 31.1% of investors indicating a heightened appetite for risk by mid-2023.
ESG and Shareholder Activism
The role of ESG in investment remains contested, as 55% of the investors surveyed represent anti-ESG sentiment, and 45% are pro-ESG. Meanwhile, only 27.3% have participated in a proxy vote in 2023. The report cites a lack of awareness and context as the main reasons for low participation.
The Public report paints a picture of a retail investment landscape in flux. Investors are not just sticking to stocks or trending sectors; they are diversifying into fixed income and other asset classes. Research and due diligence, powered increasingly by AI, are becoming cornerstones of investment strategy. While the economic outlook remains uncertain, investors are adapting and showing resilience. Their attitudes toward ESG issues and shareholder engagement are evolving, reflecting broader changes in the investment world.
Access and download the full report here